Financial firms risk harming net zero ambitions by overlooking nature in decision making

investmentweek.co.uk:

CDP noted financial firms play a pivotal role in catalysing transformative change across the industry.

While 95% of the sector, including the world's largest banks, insurers and asset managers, have stepped up their climate change considerations, only less than a third are thinking about nature-related areas such as forest and water security issues.

In the report, Nature in Green Finance, CDP found significant gaps in how financial services oversee, implement, manage, and measure nature-related impact compared to climate change.

As a result, they have urged action to be taken by starting with a system-wide recognition of the intrinsic link between the impacts on climate and those on nature.

SIF 2023: Nature-related risks cannot be 'afterthought'

The report, which analysed over 550 financial institutions, found that a failure to integrate nature and climate considerations could impede the ability of companies to fully identify and assess and disclose their impact, dependencies, risks, and opportunities.

It said most firms lack the necessary governance mechanisms and board-level expertise to integrate nature-related issues across operations and just one in ten companies currently have the metrics to measure their portfolio impact for forests and water.

While greater opportunities than risks have been identified by companies across climate, forest and water combined (estimated at over $5trn), less than 30% of them are actually capitalising on those opportunities.

CDP also noted financial firms play a pivotal role in catalysing transformative change across the industry.

Schroders unveils 'Plan for Nature'

It said: «They can implement necessary internal mechanisms that enhance robust decision-making, and simultaneously